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Colleges pressured to cut costs

May 16, 2012 - By Tony Pugh, McClatchy Newspapers

WASHINGTON -- The cost of a college education continues to increase faster than inflation; a phenomenon that's roiling family budgets and spurring calls for action on Capitol Hill.

But with a little digging, parents and students can find cost-cutting deals and programs that make the paper chase a lot more affordable.

While public colleges and universities are hiking tuition to make up for dramatic reductions to state higher-education funding, private colleges -- which usually receive no state funding -- have greater latitude to cut costs. That's one reason that average annual tuition increases at public colleges have been more than twice as large as those at private colleges over the last decade, according to the College Board Advocacy & Policy Center.

As more students question whether to take on massive tuition debt only to end up with degrees but no jobs, many private colleges are offering discount deals that cut, freeze or even eliminate tuition altogether for incoming students.

Duquesne University in Pittsburgh is slashing tuition by 50 percent for freshmen who enroll in the school of education this year. The price cut is good for four years for students who stay in the program.

High-achieving freshmen who enrolled at Seton Hall University by Dec. 15, 2011, will get a tuition discount of $21,000 --or 66 percent --for the 2012-13 school year. The same deal probably will go to freshmen for the 2013-14 school year.

"In these tough economic times, Seton Hall understands the financial concerns of families and is offering this program to help make a first-rate private Catholic education as affordable as a public education," reads a website passage from the school's office of undergraduate admissions.

Other schools --such as Ashland University in Columbus, Ohio; Thomas More College in Crestview Hills, Ky.; and the Wentworth Institute of Technology in Boston --are rolling out three-year bachelor's degree programs for the coming school year. Students who can handle the intense workload can shave 25 percent off the cost of a four-year degree.

Jacksonville University in Florida, Medaille College in Buffalo, N.Y., and Midland University in Fremont, Neb., offer four-year "graduation guarantees" in which the school pays the additional tuition if a full-time student fails to graduate in four years. Beginning next fall, Baldwin-Wallace College in Berea, Ohio, will cover the extra cost no matter how long it takes to obtain a degree.

Five years ago, only a handful of colleges offered these kinds of promotions, said Mark Kantrowitz, who publishes the college planning websites FinAid.org and Fastweb.com.

"Now we're seeing more of them, but it's still a relatively small phenomenon," Kantrowitz said.

The deals are usually one-time only offers, with colleges looking to recoup the lost revenue by attracting more students and increasing class sizes. The special offers usually mean less financial aid.

"If the tuition is going down, then the financial need is going down. So there's a natural reduction in the amount of financial aid that students get," Kantrowitz said.

The discounts serve as a publicity driver for some schools, while providing students greater predictability on costs.

"You won't get a Harvard or an Ivy League institution to do this. It's going to be a less well-known institution that can get a lot of publicity from doing it. They have to have the capacity to enroll more students to make up the difference, so it tends to be colleges that have extra capacity and compete regionally, not nationally, for students," Kantrowitz said.